Average Hospital Charge Ratio Increasing Slightly

Michigan’s average hospital cost-to-charge ratio will increase slightly Wednesday, according to an updated spreadsheet that the Workers’ Disability Compensation Agency posted to its website. The average ratio will increase 1.69% to 0.4026 from 0.3959. The cost-to-charge ratio is calculated by dividing each hospital’s total operating expenses by total patient revenues for the previous year. A lower ratio could indicate an increase in revenue, a decrease in expenses, or both. Insurer payments are determined by multiplying the amount a hospital charges by the ratio and multip...